Unlike a window air conditioner which is "self-contained", or one piece, a mini-split air conditioner or mini-split heat pump consists of two separate components: an outdoor condenser, and an indoor evaporator.

The system is therefore "split" into the compression and expansion stages of the refrigeration cycle. Refrigerant lines and electrical wires connect the condenser to the evaporator. The outdoor unit contains a compressor which pumps the refrigerant to the indoor evaporator where it expands and cools. A fan behind the evaporator coil blows the cool air into the room. Because the coil and fan blow directly into the room, the term "ductless" applies because no distribution system is required.

A ductless mini-split system is similar to a central air system in that the evaporator is "split" from the condenser, but unlike a central air system, no duct work is required.